By Rick Sarro
In honor of Father’s Day just passed, I wanted to offer up a few sayings and clichés that old dads like me have spewed many times for anyone who would care to listen. Hear me out, because these are appropriate for the subject at hand, which is the historic settlement ruling on the House vs. NCAA antitrust lawsuit.
First up: ”The grass is not always greener on the other side.”
How about: ”Be careful what you wish for.”
Or: ”Don’t bite the hand that feeds you.”
As you can tell, my early take on this event changing and latest NCAA knockout loss in the courtroom is that it may not be so athlete friendly as they hoped for, on many fronts.
I’ve not been a huge fan of the NCAA’s arrogance and decisions over the last 40 plus years, and clearly the “student athletes,” with the help of Congress, the Supreme Court and state legislatures, have taken their fair share of skin in this ongoing legal war zone.
Let me dial up a quick recap of this settlement decision, but I warn you, I clearly lack any legal expertise, nor do I play an attorney on TV.
It’s called the House vs. NCAA antitrust settlement because back 2020 Arizona State swimmer Grant House, along with women’s college basketball player Sedona Prince, filed an injunction against the NCAA proposing the unheard-of notion that athletes should garner a share of the NCAA’s massive media rights revenues.
For context, just think about the billions the NCAA makes in TV network deals, primarily from the gold encased NCAA Basketball Tournament.
The case has been in the hands of U.S. District Judge Claudia Wilken for five years. Wilken has presided over endless litigation, arguments and delays and sent out smoke signals that she was leaning in favor of House as the case embarked on another year of discussions after the NCAA and Power Conferences decided to settle the suit in 2024. Judge Wilken spent months reviewing proposals on revenue share, roster limits on various sports, timing, which athletes will receive money going back to 2016 and, of course, the tricky minefield that is Title IX.
More on that later, if I’m brave enough to go down that slippery slope
I’m sure you know by now Wilken’s recent landmark ruling, and believe me that’s an understatement. It will spread some $2.8 billion dollars to athletes (exactly who and how many is not totally clear) going back to 2016 who missed out on the riches of NIL money. That payment schedule from the NCAA will encompass 10 years. In response to the actions, NCAA president Charlie Baker, who was recently in Lake Charles visiting McNeese, took the high road in a letter he released after the settlement ruling.
“Approving the agreement reached by the NCAA, the defendant conferences and student athletes in the settlement opens a pathway to begin stabilizing college sports. This new framework that enables schools to provide direct financial benefits to student athletes and establishes clear and specific rules to regulate third party NIL agreements marks a huge step forward for college sports,” Baker wrote.
Baker and his NCAA cronies lost all power, control and oversight of NIL deals in earlier court case defeats, but this new settlement may have swung the pendulum the other way. Another slippery slope sidebar that will rear up in the near future.
The second leg of this long-awaited settlement really ripped the band aid off the NCAA’s financial grip over the athletes. Schools from Division 1 FBS down to FCS can now pay athletes directly from their athletic coffers up to $20.5 million annually (and no that doesn’t apply to McNeese or the majority of D-1 schools). This new revenue sharing plan will increase at least by 4 percent every year over the initial 10 year span.
There are still many unknowns and unanswered questions from the settlement, but it does appear schools can decide on their own exactly how much they want to or can pay their athletes. But the ruling puts a salary cap type limit at $20.5 million per year. Think of it as a means of parity and a balance within the power conferences.
This unequivocally ends any question or debate over collegiate amateur sports. College athletics is now pay-for-play, same as any other professional league. I guess we can still call them student athletes to a degree because, at last check, they are still in school, must attend classes and must post good enough grades to remain academically eligible. But that paradigm may be stretched.
Things will get a bit tricky and dicey for the athletes once athletic directors begin the process of payment planning and implementation. That $20.5 million involves the Power 4 (Have) conferences, and that’s not nearly enough money to pay every athlete in every sport. The Have-Not leagues in Group 5, FCS and all others will have much less to dole out, because the salary cap is based on 22 percent of total athletic revenues.
That 22 percent is much different at LSU or Alabama than McNeese and UL-Lafayette if they choose to go to the max payment plan.
Athletes from Pepperdine to Purdue to Paducah will soon find out this is not a bottomless pot of gold, and their hope for greener grass of the other side of this ruling may resemble more scorched pastures.
There are projections that as high as 90 to 95 percent of the money will go to the revenue producing sports of football, men’s basketball and, in some cases, women’s basketball, though he latter is questionable. The remaining 5 percent will be spread to the all others.
The math is simple. The budget will be used up by the time athletic directors get through the baseball programs. Fair or not, many of the athletes, be it men or women, in so called “Olympic sports” won’t be paid.
At this point, there doesn’t seem to be any outlined, legal framework for schools to follow in deciding how and who to pay. There are reports schools may use 75 percent for football, 15 percent for men’s basketball, 5 percent for women’s hoops and the leftover 5 percent for the all others. Another option may be using a formula based on each sport’s gross revenue produced, which would skew heavily toward football and men’s basketball, of course.
To be clear, schools are not obligated or forced to pay student athletes. They can opt into revenue sharing and also move all NIL dealings in-house and have athletic department input and control. McNeese athletic director Heath Schroyer was front and center as the ruling came down, saying the university is all-in on paying players.
“At McNeese, we’ve been preparing for this moment. Over the past year, we’ve worked with top industry experts to develop a forward-thinking strategy that ensures we’re not just adapting, we’re leading. That’s why McNeese is opting into the settlement and bringing our Name, Image and Likeness operations in-house.”
McNeese was the first Southland Conference school to hire their own assistant AD for NIL operations when they brought in local attorney Keifer Ackley, and at this point the school is the first SLC member to commit to revenue sharing. Schroyer says McNeese is “moving beyond the outdated amateurism rules and toward a more modern, sustainable model.”
That sustainability will depend on raising the bar on fundraising, success with stadium naming rights and keeping donors engaged. Of course, continued winning in men’s basketball and a football turnaround will check off a couple of big boxes.
One of the more troublesome bridges Judge Wilken had to cross in her ruling was the issue of roster limits on current players in programs across the NCAA’s 43 sponsored sports. The year-long settlement discussions were slowed over questions of schools cutting roster sizes ahead of any ruling, should current athletes be “grandfathered in” already, and what limits may be imposed on schools trying to navigate roster numbers by sport.
There is no doubt in my mind football rosters on every level will be trimmed at some point in time. Baseball might see some player cuts, as will softball, soccer, volleyball, track and field, golf teams, swim squads, lacrosse, hockey and on down the line. No one really knows, until ADs put pen to paper and see how far they can stretch their budgets and avoid red ink. But right now, Schroyer says they will begin this process with no changes in roster sizes or scholarships.
“As we move into this first year under the new model, we’ll maintain our current scholarship levels across all sports. At the same time, we’ll continue to evaluate our financial position and monitor national trends to ensure we’re making the wisest, most strategic decisions for the future of McNeese athletics,” Schroyer stated.
If you haven’t heard already, not every Power 4 conference athletic department makes money. Many don’t or maybe just scratch out a small surplus. The smaller FCS level schools like McNeese and Lamar can stay in the black because of a smaller number of sports to cover and less overhead. But now you throw in paying players and some of those rosy ledger sheets may develop some prickly thorns.
Schroyer seems optimistic the work and preparation his department has done will strike a solid financial balance. “This move (in house NIL) gives us the structure, transparency and control to support out student athletes more effectively than ever before. It means donors can give with confidence, knowing their contributions are impactful and tax-deductible.”
The athletes’ long-term objective of having schools pay them directly in some form or fashion has been a long, arduous battle, but one worth fighting. Something I never thought I would see in my lifetime. But their wish for riches may end up costing them in lost scholarships through roster cuts, loss of entire sports programs, and freedom of transfer movements through the portal.
You can bet schools will go to the courts to have paid athletes deemed employees and subject to work contracts, taxes, release clauses and whatever else they can think of.
NIL money has altered the landscape of college sports to the point it has chased elite coaches like Alabama’s Nick Saban and Virginia’s Tony Bennett into early retirement. But the transfer portal and its revolving door effects on rosters far exceeds the impact of NIL. This new, above-the-table, legal payments to players could very well usher in tighter restrictions and the ballyhooed guardrails many coaches, athletic directors and league commissioners have sought on the freewheeling transfer train presently in place.
Remember to be careful about what you wish for, because not much in life comes without strings attached.
The NIL portion of this monumental and transformative settlement will be fun and interesting to see how it all plays out. And I’m sure the athletes will not like what’s coming regarding their once untouchable NIL paydays.
The Power conferences may soon unveil the College Sports Commission that will oversee and enforce new rules and parameters on future NIL deals with athletes. Right now, there is no real oversight, governance, limits or restrictions on these third-party NIL agreements. Just ask Texas QB Arch Manning about his $6.8 million NIL package, or Cooper Flagg’s $8 million at Duke last season or that recent eye popping $1 million dollars paid to Texas Tech softball pitcher NiJaree Canady.
Those Power 4 leagues hired the large accounting firms Deloitte and LBI, both big names in money management in professional sports, to develop a uniform software program to review and dissect NIL deals combined with the player’s revenue sharing contracts. This new commission will be taking hard looks at any NIL deal over $600.00 to see if an agreement exceeds or in line with the athlete’s fair market value.
That sounds like a huge battle line in the sand to me when an up and coming star quarterback or a double-double point guard machine challenges the panel’s decision that they are not worth a $4 million annual NIL deal because some software algorithm say it’s not aligned with the commission’s view of fair market value.
The NCAA is still cut out of any NIL dealings, but Baker is in full support of this wrinkle added to Judge Wilken’s decision. “I certainly think that’s something we’ll have to work with on a coordinated basis, but on some level … that could be a really nice way — and it has an arbitration process, and it can do fact finding,” Baker says. “There’s a lot to like about that.”
There is from the school’s side of things. The athletes seeking these NIL deals will think differently.
“The approval of the House settlement agreement represents a significant milestone for the meaningful support of our student athletes and a pivotal step toward establishing long-term sustainability for college sports, two of the Southeastern Conference’s top priorities,” said SEC Commissioner Greg Sankey.
Much of this drama and high-level financial intrigue will bypass McNeese for now, but that can change if the number of zeros shrink. It’s believed McNeese will be on the hook for around $300,000 to help fund this $2.8 billion settlement figure for back NIL payments. It’s still unknown how Schroyer will budget for paying athletes, how much per player, and how many programs will see any revenue sharing. He is in constant fundraising mode through donors and corporate/business marketing deals, and that will only increase.
But schools the size of McNeese will always have a fundraising and budget ceiling because of market size and lack of sizeable TV contracts. Expenses and overhead will always be on the rise. McNeese still hopes to make the jump to FBS football someday, which will help as far as TV dollars go and an increase in shared conference revenues. But they can’t rely on that because so much is out of their control. Schroyer and McNeese have to operate in the present and now. “We’re building a model that’s clear, accountable and built to thrive in the new era of college sports.”
ACC commissioner Jim Phillips echoed Schroyer’s comments using all those aforementioned buzz words about clarity, solvency and the new world order of collegiate sports. “We look forward to implementing this new system which offers much needed transparency and structure to create a more sustainable model for the long-term future of college athletics,” Phillips says.
Whatever model these athletic directors and university presidents think they have right now could very well come under assault again in the form of Title IX, which under federal law prohibits sex-based discrimination in education and requires equal access and opportunities to women in athletics.
Legal action has already begun as eight female athletes just filed an appeal of the House vs. NCAA settlement in California federal court stating Judge Wilken’s ruling violates Title IX regarding the back-payment aspect of the case. Rest assured there will be lawsuits coming if female athletes are shortchanged in revenue sharing.
So we are left with another federal court ruling with the promise of more legal action to come.
Catch Rick Sarro’s commentary and latest opinions on Soundoff on CBS Lake Charles on Tuesday and Thursday at 10:05 pm and on Saturday at 11 pm. Follow Rick on Twitter @ricksarro.
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